It's Official: 65% of Small Firms Face ObamaCare Premium Hikes

Health Costs: Released into a news black hole last Friday, an official Obama administration report finds that ObamaCare will push premiums up for two-thirds of small businesses. Cross off another ObamaCare promise.

The report came from the actuary for the Centers for Medicare and Medicaid Services — which means it's from the administration's official ObamaCare number cruncher.

What it found was that 65% of small businesses that offer insurance will likely see their premiums rise thanks to ObamaCare. That translates into higher insurance costs for 11 million workers.

The reason? These companies generally employ younger, healthier workers and so had been paying lower-than-average rates.

But since ObamaCare bans insurance companies from considering health when setting premiums, these companies will get hit with higher costs.

"We are estimating that 65% of small firms are expected to experience increases in their premium rates," the report said, "while the remaining 35% are anticipated to have rate reductions."

The report doesn't say how big these hikes will be, but we have good reason to believe the extra costs will be significant.

One study, for example, found that 63% of small employers in Wisconsin will see premiums jump 15% because of ObamaCare. A separate study found that 89% of small companies in Maine would see rate hikes of 12% on average.

Another, by consulting firm Oliver Wyman, concluded that ObamaCare would push up small group premiums nationwide 20%.

As soon as the CMS report came out, Democratic leaders rushed to the microphones to dismiss it.

House Minority Leader Nancy Pelosi's spokesman said it was "incomplete" and that the GOP would use the report "to mislead and deceive Americans."

Rep. Henry Waxman, D-Calif., issued a memo proclaiming CMS's findings to be no big deal, since "on average, the premium decreases would be larger than the premium increases."

But that's not at all what these Democrats had promised small businesses.

They said ObamaCare would create new, fiercely competitive markets that would result in lower prices and fewer rate shocks.

In 2009, Obama promised small businesses that his plan would "make the coverage that you're currently providing more affordable." Later he said it would drive small-business premiums down by 4% in its first year, and as much as 25% by 2016.

As recently as last summer, Pelosi was proclaiming that "if you're a small business ... it lowers costs," while Waxman said the law would make "high-quality healthy insurance more affordable and more widely available for small businesses."

Notice that nowhere — either before or after ObamaCare passed — did any Democrat say anything about two-thirds of small businesses paying more for health coverage so the lucky one-third could get rate cuts.

These same Democrats also say that the CMS report suffers a "large degree of uncertainty" (which is true of any study about ObamaCare) and is "incomplete" because it didn't factor in ObamaCare's small-business tax credit.

Trouble is, this tax credit has been a complete failure.

It's so overly complex and so narrowly focused — companies must have fewer than 25 full-time workers, pay them less than $50,000 on average, cover half of premium costs, etc. — that just 170,000 claimed it in 2010, despite administration forecasts that 4 million would.

And instead of handing out $2 billion in small-business tax credits in its first year, ObamaCare has delivered a total of just $1 billion over the past four years.

By now, we've lost count of how many ObamaCare promises turned out to be phony. But this latest revelation is a devastating blow to all those small-business owners who actually believed ObamaCare would cut their health insurance bills.

Health Costs: Released into a news black hole last Friday, an official Obama administration report finds that ObamaCare will push premiums up for two-thirds of small businesses. Cross off another ObamaCare promise.

The report came from the actuary for the Centers for Medicare and Medicaid Services — which means it's from the administration's official ObamaCare number cruncher.

What it found was that 65% of small businesses that offer insurance will likely see their premiums rise thanks to ObamaCare. That translates into higher insurance costs for 11 million workers.

The reason? These companies generally employ younger, healthier workers and so had been paying lower-than-average rates.

But since ObamaCare bans insurance companies from considering health when setting premiums, these companies will get hit with higher costs.

"We are estimating that 65% of small firms are expected to experience increases in their premium rates," the report said, "while the remaining 35% are anticipated to have rate reductions."

The report doesn't say how big these hikes will be, but we have good reason to believe the extra costs will be significant.

One study, for example, found that 63% of small employers in Wisconsin will see premiums jump 15% because of ObamaCare. A separate study found that 89% of small companies in Maine would see rate hikes of 12% on average.

Another, by consulting firm Oliver Wyman, concluded that ObamaCare would push up small group premiums nationwide 20%.

As soon as the CMS report came out, Democratic leaders rushed to the microphones to dismiss it.

House Minority Leader Nancy Pelosi's spokesman said it was "incomplete" and that the GOP would use the report "to mislead and deceive Americans."

Rep. Henry Waxman, D-Calif., issued a memo proclaiming CMS's findings to be no big deal, since "on average, the premium decreases would be larger than the premium increases."

But that's not at all what these Democrats had promised small businesses.

They said ObamaCare would create new, fiercely competitive markets that would result in lower prices and fewer rate shocks.

In 2009, Obama promised small businesses that his plan would "make the coverage that you're currently providing more affordable." Later he said it would drive small-business premiums down by 4% in its first year, and as much as 25% by 2016.

As recently as last summer, Pelosi was proclaiming that "if you're a small business ... it lowers costs," while Waxman said the law would make "high-quality healthy insurance more affordable and more widely available for small businesses."

Notice that nowhere — either before or after ObamaCare passed — did any Democrat say anything about two-thirds of small businesses paying more for health coverage so the lucky one-third could get rate cuts.

These same Democrats also say that the CMS report suffers a "large degree of uncertainty" (which is true of any study about ObamaCare) and is "incomplete" because it didn't factor in ObamaCare's small-business tax credit.

Trouble is, this tax credit has been a complete failure.

It's so overly complex and so narrowly focused — companies must have fewer than 25 full-time workers, pay them less than $50,000 on average, cover half of premium costs, etc. — that just 170,000 claimed it in 2010, despite administration forecasts that 4 million would.

And instead of handing out $2 billion in small-business tax credits in its first year, ObamaCare has delivered a total of just $1 billion over the past four years.

By now, we've lost count of how many ObamaCare promises turned out to be phony. But this latest revelation is a devastating blow to all those small-business owners who actually believed ObamaCare would cut their health insurance bills.

See Also

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Hypocrisy: If ObamaCare is so great, why do Democrats repeatedly try to hide its more unpleasant features? The latest example is their desperate effort to grant still more exemptions to the law's individual mandate.This week, three House Democrats who helped usher ObamaCare through that chamber ...

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Spending: President Obama almost sounded like a free-market health care reformer during a recent interview. Too bad he can't even imagine letting the private sector fix things.in an interview published this week on Vox.com, Ezra Klein asks Obama why health care costs so much more in the U.S. than ...

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